IBM today announced
second-quarter 2009 diluted earnings of $2.32 per share compared with
diluted earnings of $1.97 per share in the second quarter of 2008, an
increase of 18 percent.

The earnings per share results were the highest for any first,
second or third quarter in the company's history, adjusted for stock
splits.

Second-quarter net income was $3.1 billion compared with $2.8
billion in the second quarter of 2008, an increase of 12 percent. Total
revenues for the second quarter of 2009 of $23.3 billion decreased 13
percent (7 percent, adjusting for currency) from the second quarter of
2008.

"As a result of our strategic transformation, we have a very strong
business model that is delivering superior earnings, cash and client
value," said Samuel J. Palmisano, IBM chairman, president and chief
executive officer.

"We have continued our strategic investments in Smarter Planet
solutions, business analytics and next generation data centers. As a
result we are optimistic about how IBM is positioned to make the most
of current growth opportunities as well as those that emerge as the
economy recovers. We are well ahead of pace for our 2010 roadmap of $10
to $11 per share."

IBM said it now expects full-year 2009 earnings of at least $9.70
per share compared with its previous expectation of at least $9.20 per
share.

18 percent of geographic revenues in Q2 came from Growth Markets.

*The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.

July 15, 2009

Digital Economy Minister Stephen Conroy released the
government's roadmap for Australia's participation in the digital
economy last night at an event at the Powerhouse Museum, Sydney. The report is now available from the government website.

This ZDNet article outlines some of the reactions from Industry at the launch. iiNet regulatory officer Steve Dalby raised the important point that we need applications that make use of the 100MBPS speeds, not just the speed itself. Brad Howarth expanded on this on his blog. A couple of his points:

"Enterprise Connect,
the digital literacy programs and small business online programs
will assist with takeup of the NBN, but there seems to be no cohesive strategy for developing
broadband-enabled services themselves.

"The work needs to be done now to equip
businesses and business associations with the skills - and potentially
the seed funding - to begin developing next-generation broadband
services today, so that they will be ready when the network begins to
go live. Failure to do so means that the benefits from the network will
not be realised until quite some time later, meaning our investment in
infrastructure may be quickly leapfrogged in economies where the focus
has been on infrastructure and services, as opposed to just
infrastructure."

I really hope we don't end up with more obtrusive rich online advertising and increased piracy (has the RIAA started lobbying against NBN / putting together a case to sue the Australian Federal Government yet?!!)

Is 100MBPS enough to support human teleportation services? Now that would be cool...

July 11, 2009

I was invited to attend the AFR Broadband Conference in Sydney last Tuesday on behalf of IBM Australia. The event attracted a variety of interesting speakers.

In short, the situation in Australia:

Broadband speeds are currently slow in comparison to the US, Europe, Japan, Korea etc. (Average download speed in Australia is 710.6 Kbps, based on 12469 tests from download-speed.org)

Broadband coverage is patchy. The cities have
reasonable coverage, but there are holes (e.g. Balmain in Sydney).
Most of the country (geographically speaking) cannot access ADSL2+ broadband. See the map.

Telstra owns the existing copper wire network. In
the cities, there is competition, with companies like iiNet having set up their
own. Unsurprisingly, where Telstra is the only provider, prices are
much higher (Telstra was privatised and therefore acts in the best interests of
its shareholders - not the public, or the country).

The Australian Federal Government recognises that digital information and communication is becoming increasingly important to businesses / the Australian economy, culture and society and that Australia will be significantly disadvantaged if the lack of broadband speed and coverage is not addressed.

The Australian Federal Government has committed to create a National Broadband Network (NBN), which will be the single largest infrastructure project in Australian history. The details are still being ironed out. This is what we know so far:

The NBN will be a wholesale only fibre network (i.e. not allowing for retail conflict as with Telstra in the past)

The NBN will deliver 100-1,000MB connection speeds via direct fibre.

The NBN will connect at least 90% of homes/premises in Australia (actually, the Hon Senator Stephen Conroy indicated during his speech that he was not interested in leaving out any % of the population).

Wireless networks will be supplementary to the direct fibre NBN.

The NBN is estimated to take approx 8-10 years to roll out (2017-2019 completion).

The NBN is expected to have a 50+ year life.

The NBN will be future proofed. (Professor Douglas Van Houweling said he expects packet info transfers will always be used via Internet Protocol but that the way those connections occur will evolve.)

The consensus was ‘yes’, a regulatory reform package is required to get the structure of the sector right.

Professor Allan Fels suggested rules governing broadcasting should be reviewed by the Productivity Commission (they performed the 2000 review).

An agreement must be reached to separate Telstra’s existing assets (their copper wire network will become obsolete with the rollout of NBN). Government may need to compensate Telstra?

The NBN must be a wholesale network, separate from retail. (This means the retail ISP’s would not be able to differentiate on product. Some are already starting to focus on customer service!)

Since the NBN project is actually a 40-50yr investment (taking adoption into account) – in order to see the project through to completion, the Labour Government would need to be re-elected three times! Because of this, it would make sense to have laws put in place to protect the build of and investments in the NBN.

2. Where will the 43 billion come from?

Firstly, the estimate of 43 billion is now considered to be on the high side. Phil Campbell from Citi Investment Research estimated, during the panel discussion that it would cost 30 billion.

The Federal Government recently committed 5 billion (the Hon Senator Stephen Conroy confirmed during his speech that they would foot the whole bill if necessary, though they don't expect to have to do that). Suggestions were: 10 billion vended assets, 20 billion via infrastructure bonds (tax free investment opportunity).

3. What will the NBN mean for the broadband industry in Australia?

In the next 8-10 years (the gap prior to NBN), steps must be taken to ensure existing broadband services continue to expand and competition continues in order to keep prices down.

Once NBN is in place, the ISP’s will need to differentiate based on service (as the product will be ubiquitous). This is the situation in Korea, where the broadband network is a wholesale monopoly with the retailers playing on top of it.

4. How will the NBN change things for business, society and the country?

Rohan Lund from Yahoo!7 spoke about the media revolution we’re already seeing as audiences use the internet to communicate, discover and be entertained. He outlined how Australians have adapted their internet behaviour to the speed currently available:

Yahoo!7 (which aims to be a guide to content on the internet) holds proportionately less market share to Google in Australia than in other countries. Google’s cleaner, faster search experience has been embraced by 90% of the Australian market.

Video is consumed, but in low quality, bite sized chunks.

The lighter social networking sites are most popular.

Clearly the NBN would be a good thing for Rohan and Yahoo!7 !

Abigail Thomas from the ABC talked about some of the innovative projects she’s undertaking. ABC iView (internet television) is, I gather, currently only feasible due to agreements with several ISP’s whereby the content download charges are not ‘metered’ for their customers.

Professor
Douglas Van Houweling (in the US) joked via phone hook-up (after his
video speech had been played) that it was a shame he couldn’t yet see
us – his audience – via real-time video hook-up. Real-time video upload
will be possible with the NBN.

Related points:

Professor Douglas Van Houweling said the rest of world will be watching as Australia rolls out the NBN and becomes a leader in this area. He suggested the US needs to think about ensuring 100MB connectivity within 3 years, with at least 10MB upload speeds. (It’s important to remember users will contribute, not just consume. Example is medical centres uploading x-rays.) This point re. upload capacity will hopefully be considered for the Australian NBN.

NBN will ‘float the boats’ in that many internet based applications that will be created by the business community and government will be reliant / sit upon it.

Korea currently has the fastest broadband speeds in the world and is investing 24 billion to increase to 1GIG connectivity by 2012!

Videos of some speeches from the conference:

Marianne King, first assistant secretary for Department of Broadband Communications and the Digital Economy.

June 16, 2009

"StrongMail Systems Monday unveiled a strategy
and a set of tools intended to link email marketing with social media
campaigns on Facebook, MySpace, Bebo, and Digg, among others. Its
"framework" turns static email programs viral.

"StrongMail developed the tools in response to requests by retail
customers. The survey conducted by StrongMail reveals that email
marketing linked to social media has become an important initiative,
with 66% of marketers planning to integrate the two channels in 2009,
and 48% who have already formulated a strategy for achieving this
initiative.

"Of those marketers planning to increase budgets in 2009, 83% will
increase amounts in email marketing, followed by 62% in social media."

Interesting. Makes sense for retail. I guess the other email tool providers will be playing catch up!

May 27, 2009

IBM's CEO Sam Palmisano has outlined a new formula for changing the world: Find problems, throw in billions of dollars in R&D, add consultants and an earnest ad campaign - and watch the profits roll in. Read about it in this CNN article.

The ad campaign is called Smarter Planet, keep an eye out for it. I'd love to hear what you think.